Social Security benefit amount confusion - $1200 at 64 vs $1800 at 62 with similar salaries?

There are several factors that could explain this difference: 1. Your neighbor's benefit amount of $1800 sounds unusually high for someone with a $40k average salary who's claiming at 62. The typical replacement rate would put them closer to $1300-1400 at Full Retirement Age, and claiming at 62 would reduce that by about 30%. 2. Years worked matters a LOT. Social Security uses your highest 35 years of earnings. If you have fewer than 35 years of work, you'll have $0 years averaged in, which significantly lowers your benefit. 3. Are you sure your neighbor is only getting retirement benefits? They might be receiving additional benefits like: - Spousal benefits on top of their own - Survivor benefits from a deceased spouse - Disability benefits (SSDI) which aren't reduced at age 62 like retirement benefits I'd recommend creating a my Social Security account at ssa.gov to see your actual projected benefit amounts at different ages.

The SS system is RIGGED against regular workers!!! I worked 40 years and my benefit is pathetic. Your neighbor is probably getting survivior benefits on top of her own which is WHY the amount is so high. The government doesn't bother explaining ANY of this clearly. They WANT us confused so we don't know what we're entitled too!!!

Wait so do we get more if our spouse dies? My husband and I are both 60 and trying to figure out when to apply. So confused about all this.

I had similar confusion about my benefit amounts. When I called SSA, I spent THREE HOURS on hold only to get disconnected! Then tried again next day, another 2 hours waiting. Finally I used Claimyr.com to get through - they called SSA and then connected me once an agent was on the line. Saved me hours of frustration! You can see how it works at https://youtu.be/Z-BRbJw3puU Once I actually talked to someone, they explained I was seeing different estimates because my earnings record had some mistakes. Worth checking your record to make sure all your earnings are correctly reported.

I'm trying to understand this too! I'm 63 and when I look at my statement it shows different amounts for different ages. Does anyone know if the estimates on the SS statement already factor in cost of living adjustments for future years? Like if it says I'll get $1450 at 67, does that include estimated COLA increases?

ur neighbor is lying about how much they get. no way they getting that much on 40k salary. people always exaggerate what they get from ss. my brother in law kept saying he was gettin 2200 but my sister told me it was really only like 1700

To summarize what several people have mentioned: 1. Your neighbor is almost certainly receiving survivor benefits from her deceased husband on top of her own retirement benefit. 2. Your 31 years of work versus the required 35 is reducing your benefit by approximately 11-13%. 3. The $5K difference in salary ($35K vs $40K) would account for about a 14% difference in benefits. Combined, these factors could easily explain a $600 difference. I strongly recommend: - Create a my Social Security account if you haven't already - Check your earnings record for accuracy (missing earnings is a common problem) - Look at your personalized benefit estimates at different claiming ages - Consider scheduling an appointment with an SSA representative to review your specific situation

Glad to hear you got it figured out! The missing earnings year is probably worth fixing - even one year of unreported earnings can make a noticeable difference in your benefit calculation. When you contact SSA about the correction, make sure you have your W-2 or tax return from that year as proof. It's also worth double-checking a few years before and after that missing year, since sometimes there are patterns to reporting errors. I discovered I had three years in a row where my earnings were underreported by my employer, which would have cost me about $80/month in benefits if I hadn't caught it. Since you're planning to retire next year, you might also want to run the numbers on claiming at 62 vs waiting until your full retirement age. With your corrected earnings record, the difference might be more significant than you initially calculated.

As someone who just went through this process myself, I wanted to add that when you contact SSA about missing earnings, be prepared for it to take some time. In my case, it took about 6 weeks for them to review my documentation and update my record. They had to verify the information with my former employer. Also, since you mentioned planning to retire next year, keep in mind that if you're born in 1960, your full retirement age is 67, not the 66 and 10 months mentioned above. The FRA gradually increases based on birth year. You can find your exact FRA on the SSA website or in your online account. One more tip: if you do decide to claim early at 62, the reduction is permanent - it doesn't go back to the full amount when you reach FRA. So make sure you're comfortable with that lower monthly payment for the rest of your life before making that decision.

Just wanted to chime in as someone who works in retirement planning - this whole thread is a perfect example of why it's so important to understand all the moving pieces with Social Security! I see this confusion all the time with clients. The survivor benefits piece that everyone identified is huge - when someone loses a spouse, they can often end up with a higher total monthly income from Social Security than they had when both spouses were alive, especially if the deceased spouse had higher earnings. One thing I'd add to the great advice already given: when you're reviewing your earnings record, pay special attention to years where you might have had multiple jobs or changed employers mid-year. Those transitions sometimes create gaps in reporting. Also, if you ever worked for tips (restaurant, salon, etc.), make sure those tip amounts were properly reported - I've seen cases where the base wage was recorded but not the tips. Since you're planning to retire next year, this is also a good time to think about Medicare enrollment timing if you're not already covered through an employer plan. The Social Security and Medicare timelines don't always align perfectly, so it's worth planning both together.